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This Global Ethics Corner from the Carnegie Council does a nice job of laying out the core questions we should be asking about the bipartisan push in Washington for a revival of manufacturing in the U.S.: "Is the rebirth of America's manufacturing industry necessarily a good thing?" This, and the other questions raised in the slide-show about factories and innovation, should be good conversation starters for a class discussion on the role of manufacturing in the U.S. economy today.

So maybe IBM, Google, Apple, and other big dogs get the bulk of the patents. Small firms can also drive innovation. G. Michael Maddock and Raphael Louis Vitón of Maddock Douglas say the key is not the size of the firm, but the size of the idea. And, writing at Businessweek , they argue not to waste anybody's time with small ideas: So when it comes to industry-changing ideas, the size of the ideas and the resolve behind them really do matter. We believe leaders should talk about big ideas. Big ideas get your company attention. They demand a higher price. They increase loyalty. They demonstrate that you know how to listen, invent, and take risks. Great leaders know how to recognize, promote, and successfully launch big ideas. Small ideas do just the opposite. With all your big talk, you may get someone to look at them, but in the end they will cost you your reputation, your team’s loyalty, and your customer. Far too often, leaders make the mistake of talking about big ideas that are really embarrassingly small. Read Innovation: Size Matters here .

Jeff Dyer , professor at Brigham Young University's Marriott School of Business , studies "disruptive innovators." And he says other business leaders can learn a lot by studying the ways in which these innovators come up with disruptive ideas through experimentation. In this Harvard Business Review IdeaCast , Dyer discusses techniques to introduce more innovative thinking in the workplace:

IBM is marking the 100th anniversary of its incorporation. And far from being a relic, IBM seems to have caught its stride once again in the last decades. Take a look at the company's market capitalisation compared to its young competitors in the tech sector (from The Economist ): It is a remarkable feat for any company, but especially so for a high tech company. IBM operates in a field where the basic foundation of business products changes rapidly. But, as The Economist details, the company has survived by doing what so many companies across a variety of fields fail to do. Its business was based on punch cards, but it did not allow itself to become a dinosaur when punch cards started to fade in favor of the early calculating machines. As leadership of the company passed from Thomas Watson, Sr., to Thomas Watson, Jr., IBM became the global leader in computing. From The Economist: Under the younger Watson, IBM became by far the world’s biggest computer-maker. He did the trick by betting the company on the System/360, IBM’s first family of mainframe computers, which took years and $5 billion (in 1960s dollars)—more than the Manhattan Project that led to the atomic bomb—to develop. Launched in 1964, the System/360 became the first dominant computing platform, mainly because all the family’s machines, big or small, were “compatible”, meaning they could run the same software. By 1969 IBM’s market share had grown to 70%. It thus became the first IT company to be called an “evil empire” and aroused the ire of America’s antitrust authorities. The Reagan administration eventually dropped the case in 1982, asserting that it had been “without merit”. The second platform shift—from costly mainframes to “distributed” computing systems, including PCs—was a much closer shave. Even while the antitrust case was dragging on, technological progress had begun to undermine IBM’s near-monopoly and, more importantly, its business model of renting its expensive machines to customers. Since this was highly profitable, IBM was very slow to deliver cheaper and distributed computing systems, made possible by new processors. When these systems took off in the early 1990s, IBM’s business collapsed. Mainframe revenues dropped from $13 billion in 1990 to $7 billion in 1993 and losses of $16 billion piled up. “Only a handful of people understand how precariously close IBM came to running out of cash,” wrote Lou Gerstner, who was brought in to turn the company around, in “Who Says Elephants Can’t Dance?”, his book about the revival. He fired 35,000 employees to cut costs. The lesson of the story appears to be that companies that develop a strong sense of what the company is rather than being simply a vehicle for a certain product or certain type of product stands a better chance at long term success. Read IBM: 1100100 and counting here .

Federal Reserve Chair Ben Bernanke made the case for government support for research and development yesterday. Speaking at The Conference Board 's New Building Blocks for Jobs and Economic Growth conference, Bernanke said that "innovation and technological change are undoubtedly central" to economic growth and widening prosperity. And he argued that government has a key role in sparking innovation: Governments in many countries directly support scientific and technical research, for example, through grant-providing agencies (like the National Science Foundation in the United States) or through tax incentives (like the R&D tax credit). In addition, the governments of the United States and many other countries run their own research facilities, including facilities focused on nonmilitary applications such as health. The primary economic rationale for a government role in R&D is that, absent such intervention, the private market would not adequately supply certain types of research.3 The argument, which applies particularly strongly to basic or fundamental research, is that the full economic value of a scientific advance is unlikely to accrue to its discoverer, especially if the new knowledge can be replicated or disseminated at low cost. For example, James Watson and Francis Crick received a minute fraction of the economic benefits that have flowed from their discovery of the structure of DNA. If many people are able to exploit, or otherwise benefit from, research done by others, then the total or social return to research may be higher on average than the private return to those who bear the costs and risks of innovation. As a result, market forces will lead to underinvestment in R&D from society's perspective, providing a rationale for government intervention. Read the full speech here .

Michael Arndt , the writer of Business Week' s online NEXT: Innovation Tools & Trends column, is asking for comments on the most innovative companies. Business Week will publish the 2010 rankings next week. Arndt has posted the 2009 top 25. Here's the top 5: 1. Apple 2. Google 3. Toyota Motor 4. Microsoft 5. Nintendo Innovative or not, it is hard to imagine Toyota holding its ranking with all of the company's recent problems. Who do you see at the top this year? Read Debate: Who's the Most Innovative Company of 2010? here , and then tell us what makes a company stand out as a leader in innovation.

Amazon keeps sales numbers for its Kindle close to the vest, but ABC is reporting that November was the biggest month yet for sales of the e-reader . And analyst Sandeep Aggarwal of Collins Stewart is estimating total sales of the Kindle to reach 550,000 by the end of 2009 . Good numbers for Amazon just as the e-reader market begins to heat up, with Sony upping the advertising for its e-reader and Barnes and Noble now taking pre-orders for its Nook e-reader. Whatever Kindle's future, it stands as one of the more recent innovative success stories in US consumer technology. And its real breakthrough is the display, which is also its most expensive component to build. Willy Shih , professor of Management Practice at Harvard Business School, is concerned that the display depends on overseas manufacturing, and not so much because that will contribute to the trade deficit. Rather, Shih argues that "when innovations can't be manufactured in the U.S., the locus of innovation in that area frequently shifts to the countries that can manufacture them." The more worrying thing to me, though, is the likelihood that by not manufacturing the electrophoretic display, the U.S. will miss out on the future industries that spring from it — things like large flexible displays, future generations of electronic signage, and plastic electronics. Those technologies could, in turn, spawn other innovations and new industries. Years ago the U.S. lost the vast majority of its infrastructure, or "commons," in precision optics to Japan. The Japanese used those capabilities to grab the lead in producing lithography tools for semiconductor manufacturing, which, in turn, drove most American semiconductor manufacturers out of the DRAM business. The Japanese also employed those capabilities to expand into lithographic tools needed to manufacture flat panel displays. This same story has played out in high tech industry after high tech industry. The lesson: Sometimes when you let your capabilities get away, you give up not only one industry but all its progeny. Read The U.S. Can't Manufacture the Kindle and That's a Problem here .